15 ms·

Since the article states "the trigger for the latest sell-off is unclear" I'm really curious if somebody here could venture a guess about the reasons for the su

by simias 8y ago

Since the article states "the trigger for the latest sell-off is unclear" I'm really curious if somebody here could venture a guess about the reasons for the sudden drop. The Bitcoin Cash fork seems suspiciously correlated but is it big enough news to cause such a turmoil? Being a cryptocurrency-skeptic I won't pretend that I don't experience a little bit of schadenfreude when I see CC crash, however if I'm trying to be a bit more constructive I suppose that means that we're nearing the "make or break" point: if the huge investment in cryptocurrency-related technologies over the past four years or so manages to produce something actually useful over the next year I have no doubt that this is only a temporary set-back and we'll see BTC (or some other coin) breach $20k again. On the other hand if, like I believe, it's mostly scams, empty promises and poor understanding of technology and/or economy, then this might be the beginning of the end. Hype can only sustain a $100 billion market cap for so long. That being said I wouldn't be the first Pythia to erroneously predict the downfall of cryptocurrencies...

jeletonskelly 8y ago
Trading volume has dropped significantly over the last 6 months. Large holders have been patient waiting for new money to enter the market. Eventually, when the only activity is a few automated traders and the exchange liquidity provider, large holders are faced with opportunity costs of investing in something else and the limited liquidity the market can absorb as they exit. It's a domino effect as they see each other wiping the liquidity off the books as they market sell. No one wants to be the last one holding the bag.
- superkuh 8y ago
  This is also the result of the federal governments of the world, the US in particular, choking off all the fiat<->crypto exchanges with their expanded and draconian know your customer laws. As an anecdote, I didn't buy my monthly bitcoin purchase early this month because I've been (and still am) locked out of my ~5 year old coinbase account I use constantly because they are being required to require new forms of ID and I cannot supply it. Even if the stupid speculation markets and their off chain antics didn't exist this would be a problem.
  - scient 8y ago
    Yeah, KYC/AML is totally bad because of trying to actually prevent money being funnelled into crime organization etc. This is why I cant stand ignorant crypto-fans.
    - Hermel 8y ago
      Even according to the IRS's own estimates, laws like Fatca would never pass a cost/benefit test. The implementation costs of such bureaucratic monstrosities is in the range of hundreds of billions, whereas the benefit is a few orders of magnitude lower. The established banks do not complain much about it because the high fixed cost of compliance disproportionally affects small firms, thereby protecting them from being disrupted by innovative startups.
      - deleted 8y ago
        [deleted]
      - simias 8y ago
        So I know next to nothing about these regulations but what do you mean by "cost/benefit" exactly? Surely if these rules are meant to fight (directly or indirectly) organized crime then you can't just judge them on the amount of money saved? If you spend $10 millions to prevent $1 million to reach a terrorist organization, can't you consider it money well spent?
        avar 8y ago
        FATCA is about making non-US financial institutions report to the IRS et al about holdings of US citizens abroad. Worrying about terrorist cells in foreign countries made up of U.S. citizens is absurd.
        toomuchtodo 8y ago
        FATCA is the stick used to dissuade tax evasion by US citizens. If people think they can evade taxes successfully, they will. Whether this impacts Bitcoin or other crypto is inconsequential.
- Novashi 8y ago
  It seems like the bitcoin selloff coincided nicely with the general stock market selloff. I think someone wanted out of bitcoin after staring at a flat price line for 6 months.
  - jeletonskelly 8y ago
    Someone wants out and they know there's limited buy side liquidity. Once the primary market maker algos detect a big move, they get out of the way so they aren't overexposed long or short. Once they pull the liquidity it becomes a race to sell first.
  - Scoundreller 8y ago
    As a stock market investor, a flat line for the past 6 months sounds pretty good to me!
    - polynomial 8y ago
      but no dividends.
- aviv 8y ago
  The Saudis facing confiscation and raids back home dumped their cash into Bitcoin which fueled the rally to $20k. They are now pulling the money out.
  - ucha 8y ago
    I never heard this one... what do you have to back it up?
    - olivermarks 8y ago
      Jonathan Nelson, Managing Director HACK Fund discussed this on last week's sharespost webinar. The slides and replay should be up soon if you check their site. Discussion was titled 'State of Crypto Markets and Regulation: USA vs. the World – SharesPost Expert Series'
  - olivermarks 8y ago
    The vast majority of cryptocurrency transactions are in Asia, meaning China, Singapore & Japan according to a sharespost webinar I tuned in to last week. Getting money out of China has been a driver of cryptocurrencies in 2017 and early 2018, with little utility other than moving money around to invest in safer havens.
    - tacon 8y ago
      I can see Chinese capital flight as a driver of transactional bitcoin. How does that lead to holding bitcoin as an investment?
  - dopamean 8y ago
    This reminds me of an anecdote from Liar's Poker where the writer talks about how not even the oil traders understood what caused the price of oil to move and so they'd just make up outlandish stories about the Saudis.
  - charlesdm 8y ago
    And Santa wears a hat
- oldpond 8y ago
  Sounds just like a ponzi scheme bursting. No surprise.
  - ric2b 8y ago
    Ponzi schemes tend to collapse quickly and spectacularly.
- tialaramex 8y ago
  Yup. Liquidity isn't something you need to care about if you trade something listed on an exchange, at reasonable volumes (neither very tiny nor enormous). If nobody else wants it the market makers will automatically take the other side of any trade at the listed buy/sell price, and keep the difference, that's their job. But Bitcoin, BBS stocks, weird instruments that aren't listed anywhere, those you can only sell if you can find a buyer, if there is no buyer (or no buyer at the volume you care about) then the "price" doesn't mean anything at all.
  - repomies6999 8y ago
    LOL, numerous listed stocks are way more illiquid than bitcoin.
hi5eyes 8y ago
the recent fork/shit show within the bitcoincash camp (im not getting into this debate just an observation) resulting in 2 forks and split in hash power. the camps being btcsv and btcacb. yes those are their real names, and I think they're all stupid
- npongratz 8y ago
  > ... the camps being btcsv and btcacb. yes those are their real names ... I think you might have a typo, I believe it would be btcabc: https://www.bitcoinabc.org https://www.bitcoinabc.org
  - hi5eyes 8y ago
    you're right mb
- lostmsu 8y ago
  Why would it affect BTC, let alone ETH and others?
hyperpape 8y ago
I can't swear that it's the cause, but it looks like expectations have changed around whether ICOs would be required to classify themselves as securities: https://twitter.com/prestonjbyrne/status/1064714421061255168 https://twitter.com/prestonjbyrne/status/1064714421061255168 This has been obvious to everyone paying attention for a long time, but most people in this market are there because they don't pay attention.
- danaos 8y ago
  As a counterpoint, bitcoin has dropped faster than Ethereum, the principal ICO platform.
  - airstrike 8y ago
    Only because Ethereum dropped significantly more earlier in the year (from $293 in September to $193 a few days later...)
ceejayoz 8y ago
Ongoing concerns about Tether can't have helped. https://www.bloomberg.com/news/articles/2018-11-20/bitcoin-rigging-criminal-probe-is-said-to-focus-on-tie-to-tether https://www.bloomberg.com/news/articles/2018-11-20/bitcoin-r... > As Bitcoin plunges, the U.S. Justice Department is investigating whether last year’s epic rally was fueled in part by manipulation, with traders driving it up with Tether -- a popular but controversial digital token. > While federal prosecutors opened a broad criminal probe into cryptocurrencies months ago, they’ve recently homed in on suspicions that a tangled web involving Bitcoin, Tether and crypto exchange Bitfinex might have been used to illegally move prices, said three people familiar with the matter.
dmos62 8y ago
I don't having much to say about fundamentals. From a technical analysis point of view, according to EWT, a correction mostly happens in three strokes. First stroke was 20k->6k, second was a year long sideways move, this is the third one that will reach the extreme of the correction. In these terms, what we're seeing this last week is an extension of what was happening beginning of 2018; i.e. to ask why this happened is the same as to ask why the price fell from 20k.
koonsolo 8y ago
I am a firm believer that cryptocurrencies can offer major value to the world. But if you look at what's out there, Bitcoin etc are outdated technologies. Since Bitcoin was always leading the charts, in my opinion the whole market had to crash, and out of that it will show which ones offer true value. You shoudn't focus too much on price, but mainly focus on applicability and adoption/use. Most doctors here only offered cash payments, but nowadays a lot of them offer smartphone payments. They lose 6 cent on every transaction. Imagine a world where I can pay instantly, worldwide with a single currency, 0 fees. The technology is already here, the adoption not (yet ;). We have email, which is basically instant, free and worldwide. Why can't we have the same for payments? Only time will tell if such a major shift can happen.
- zanny 8y ago
  The thing is that the trading price of crypto does not mean anything to its adoption or utility. You can write a payout algorithm that grows the monetary base so fast the price can't appreciate. That coin could become unbelievably successful without ever being a viable dragon horde to sit on of endlessly growing value due to scarce supply. Its really a reflection on the doomed state of the mainstream crypto mindset to only really care about getting rich quick in fiat off cryptocurrency bubbles. Bitcoin doesn't matter as a currency, it matters as a pyramid scheme. The people investing in it for personal financial gain dramatically outpace those trying to use it to overthrow fiat hegemony. There have been coins like peercoin and Steem that have in small regards or parts tried to push the adoption envelope as a usable exchange medium over the pyramid scheme, but they are few and far between and their general unpopularity really shines a light on where the scenes true values lie.
- Brockenstein 8y ago
  >We have email, which is basically instant, free and worldwide. Why can't we have the same for payments? Only time will tell if such a major shift can happen. Ever had a free email account compromised? Good luck. Not to mention email isn't free. Someone is paying for it and making money from it. Even if that is concealed behind several layers that aren't obvious to most users.
- perardi 8y ago
tboyd47 8y ago
Occam's Razor - could just be a symptom of the current stock market crash.
- Scoundreller 8y ago
  What stock market crash? Vanguard’s Total Market Index (VTI) is up 2% for the year, and only down 10% from its All Time High (excluding dividends): https://finance.yahoo.com/quote/vti https://finance.yahoo.com/quote/vti Tech stocks aren’t the whole market.
  - wyldfire 8y ago
    True but a lot of Bitcoins investors probably get disproportionate amounts of equity compensation in that part of the market.
  - kart23 8y ago
    Even index stocks are in free fall right now. Check again. VOO has dropped 1.5% today, which is pretty bad for an index stock.
    - ceejayoz 8y ago
      > VOO has dropped 1.5% today, which is pretty bad for an index stock. Uh, what? An index stock mirrors, as closely as possible, the market it's indexing. If the market goes down 1.5% - which is extremely common - so will VOO.
      - sneak 8y ago
        I think GP meant it is pretty bad in the market if the composite index average (and thus index ETF) is down 1.5% in a single day.
        ceejayoz 8y ago
        Which is a silly claim. The markets being down (or up) 1.5% is an unremarkable trading day. https://thumbor.forbes.com/thumbor/960x0/https%3A%2F%2Fblogs-images.forbes.com%2Fmikepatton%2Ffiles%2F2016%2F01%2FDJIA-Daily-Percent-Chg-from-10-1-1928-to-1-28-2016-1200x499.jpg https://thumbor.forbes.com/thumbor/960x0/https%3A%2F%2Fblogs... Per this chart, almost 20% of Dow trading days fall in the 1-2% change range.
tyingq 8y ago
ETH isn't doing well either, so there must be more than the BTC cash fork in play.
- pilpulpitbull 8y ago
  All cryptocurrencies are directly correlated to the price of Bitcoin. My personal theory is the participants in the Bitcoin Cash hashwar (Bitcoin.com, bitmain, and CSW) are selling their massive BtC stash to finance rented hashrate and cover electricity costs.
- dlwiest 8y ago
  BTC is strongly linked to the rest of the crypto market. When BTC drops, the rest follow almost always.
pavlov 8y ago
Perhaps the recent SEC action against multiple ICOs is contributing too? Long story short, the American regulator has determined that the 2017 hype-fuelled ICOs were unregistered security sales (just like everyone said they are, but ICO promoters pretended to hand-wave away by mumbling something about utility tokens). They've fined an initial wave of ICOs to the tune of $250k and mandatory refunds to all who bought tokens in the ICO. The catch here is that the refunds must be paid in USD, but the ICOs mostly raised in cryptos. If you did an ICO in December 2017 and raised $10M worth of cryptos but never cashed out any of it, your treasury is now perhaps worth only $2M, yet you're liable for $10M USD refunds. Any ICO administrator within reach of American regulators ought to be cashing out while they can...
- tfha 8y ago
  I wonder if ico issuers are selling off btc and eth in order to have enough cash on hand to do the asset buybacks and still be ahead. Anyone who ICO'd in early 2017 (including big names like tezos and filecoin) have enough USD value of btc and eth to comply with the SEC and still have 9 figures left. It's a good time to take profit if you did that, get off the hook and still be incredibly cash wealthy. That would also explain why ripple is still stable, not as many icos hold xrp as btc and eth
deleted 8y ago
[deleted]
quickben 8y ago
> could venture a guess about the reasons for the sudden drop It has to decline, I was giving it 2-5 yeas, but it seems it dropped much faster: https://news.ycombinator.com/item?id=15760415 https://news.ycombinator.com/item?id=15760415 As for the faster than usual now, my guess is few things. Main contribution is NVidia that had their earnings report, they told the planet flat out gpus aren't selling as well, so the gig that everybody is increasingly mining was called up. Normal people check out, traders can't trade if they can't short it and it's starts going downhill. So anybody that's in the business of not losing money stops the bots. But nvidia the most visible thing that creates sentiment among the crypto-evangelist population it seems. The other reasons wound be, end of a 40 year bull run across western democracies, end of the minor cycle economy run, add to that a trade war, QT, people overexposed on the houses with HELOCs and stuff from that QT, and everybody will be pulling cash from everywhere since cash will matter fairly soon. The rest is standard, stock market drop by 20% or much more, asset bubble deflation, etc etc. It's all fairly cyclical.
- pault 8y ago
  Hasn't GPU mining been unprofitable for at least five years now? I remember everyone moving to asics back in 2012.
  - dragontamer 8y ago
    Any GPU mining is assumed to be on Ethereum, Monero, or ZCash. Which... at least a few months back... remained profitable. I don't know if its profitable anymore since the prices have dropped so dramatically.
  - deleted 8y ago
    [deleted]
- dragontamer 8y ago
  > Main contribution is NVidia that had their earnings report, they told the planet flat out gpus aren't selling as well, You've got cause / effect backwards. The slide started on Nov 13th, while NVidia's earnings report is Nov 15th. The NVidia thing was my first hypothesis too. But it doesn't seem to hold up to scrutiny.
rebuilder 8y ago
The latest bubble continues to deflate. I'm not about to make any predictions at all, but a drop to 1500 or so would be quite "normal" for Bitcoin, historically speaking. Again, there's no particular reason to think it will go there, or if it does, stop there. The volatility in crypto is just so high it's hard to say there's any particular reason for price movements beyong trader's reactions to price movements.
xiphias2 8y ago
With BTC this is just normal volatility. The usual drawdowns that are happening every 1-3 years are about 75% - 95%. If the price of BTC goes under $1000 that will be something new. I can't speak of other coins as they are a very different market (and I'm a Bitcoin maximalist).
- dd36 8y ago
  Demand will not recover.
  - coinshakedown 8y ago
    This probably won’t age well
- pbhjpbhj 8y ago
  By "Bitcoin maximalist" I assume you mean you want to see it enter widespread use as currency? Any thoughts on the extreme environmental downside of BTC?
  - natmaka 8y ago
    Existing (non crypto/legal tender) also has environmental downsides. Is there a serious study comparing the environmental downside of currencies (crypto and not crypto)?
  - xiphias2 8y ago
    It means that I think it will eat all money (and most altcoins as well) over the next 15-20 years. About the downside: I hope using coal as an energy source will be shut down ASAP. Bitcoin protocol would easily work with only sustainable energy sources, but it doesn't work without the security of proof of work (all other algorithms for decentralized concensus so far decrease security of the protocol). Luckily China already took some steps to close down the most polluting Bitcoin miners.
mdgrech23 8y ago
Quite the lexiphanicism aren't you?
- simias 8y ago
  Not purposefully I assure you. English is not my mother tongue and I know that my vocabulary is all over the place at times. If you have some feedback about things I could've worded better I'll gladly hear it.
  - deleted 8y ago
    [deleted]
- Stratoscope 8y ago
  If you're going to use a fancy word like lexiphanicism to criticize someone, you should at least use it correctly. ("Lexiphanicism" does not refer to a person, but to their use of language.)
jackjackk0 8y ago
I like to think it's because of this article: https://www.nature.com/articles/s41558-018-0321-8 https://www.nature.com/articles/s41558-018-0321-8
- SNACKeR99 8y ago
  Nothing has soured me more on bitcoin than its impact on the environment. If for no other reason than that, I'm done with it.
- gl00pp 8y ago
  I mean I hear ya but it seems a little bias when they are 'projecting'. I mean, if I had 0 wives last week, got married this week, does that mean in 2 months i'll have 8 wives? (no i am not in UT) "Here we show that projected Bitcoin usage, should it follow the rate of adoption of other broadly adopted technologies"
  - asdff 8y ago
    Even today bitcoin is a serious energy concern. Currently the network uses as much energy as Denmark, while commanding a 0.033% share of cashless transactions. Which countries will bitcoin surpass in energy usage in 2019 as mining gets exponentially more difficult by design?
deleted 8y ago
[deleted]
jasonwen 8y ago
I discussed the things that happened specifically on November 14th in my Quora answer: https://www.quora.com/Why-did-the-price-of-Bitcoin-plummet-down-on-November-14-2018/answer/Jason-Wen-3 https://www.quora.com/Why-did-the-price-of-Bitcoin-plummet-d... It's very very likely because of the Bitcoin Cash fork. It has become a pissing contest between Roger Ver (Bitcoin ABC) and Craig Wright (Bitcoin SV). While Craig trolls and threatens the Bitcoin ABC side by "bleeding them dry" in a hash war. Jihan Wu, founder of Bitmain quoted: “I have no intention to start a hash war with Craig, because if I do, by relocating hash power from BTC mining to BCH mining - BTC price will dump below yearly support; it may even breach $5,000. But since Craig is relentless, I am all in to fight till death! The war is related to Bitcoin as the price of Bitcoin tanks because in a hashing war, both sides are likely to rent hash from the Bitcoin mining pool. This is being settled in Bitcoin, sold on the market to cover electricity, and thus suppressing the price of Bitcoin. Since Craig is trolling around, threatening a price of $1,000 per Bitcoin in a full out hash war, people are selling before it gets even more ugly. Another downside which reinforces the price suppression is for Proof-of-Work systems (where miners are rewarded based on their computing power), there's an unfortunate feedback loop in price drops. As said by Colin, founder of Nano currency, Low price -> low mining rewards -> turn off some miners to lower cost -> lower hash rate -> longer transaction confirmation -> lower price. More details can be found in my Quora answer about this.
- wpietri 8y ago
  I think it's fascinating that this is 100% different than what Bitcoin was sold as. The theory of Bitcoin was basically "money without people". You wouldn't have to worry about governments and politics; value would be sent and stored in pure pieces of math. Mere governments couldn't possibly do as well as the glorious algorithms wisely fixed in advance by, etc, etc. But if you're right, Bitcoin has way more politics than a third-world kleptocracy. And it clearly lacks the institutions and formal procedures used to shape those kinds of political currents into useful effects on the currency and the economy.
  - latchkey 8y ago
    There is differences between the white paper and the implementation. There is also another elephant in the room... whales who have enough money (thanks to crypto currencies) to influence things.
sneak 8y ago
I predicted last fall there would be a huge sell-off as short term cap gains (35%) turn into long term cap gains (15-20%) at the 12 month mark. Time to lock in the remaining profit and realize those gains.
throwaway5752 8y ago
"somebody here could venture a guess about the reasons for the sudden drop" It has no inherent value, is a poor currency substitute, it is a poor store of value, and is on a long term trajectory to zero. People are realizing this and liquidating large/low basis cost positions.
- gaff33 8y ago
  This may all be true - but it fails to explain why it crashed now (as opposed to 2 months ago, or 2 months hence).
endorphone 8y ago
"I'm really curious if somebody here could venture a guess about the reasons for the sudden drop" A more telling question is how it has held any value at all for as long as it has. There was a period where BTC's rise was rationalized via its promise to become the currency of the future. Does anyone actually believe that now, though? BTC instead has become nothing more than a speculation vehicle built on a foundation of absolutely nothing. No rational analysis sees it being the basis of really anything at all, and that mad rush has seen an outrageously inefficient system put in play. It wouldn't be bad if it were actually the basis of meaningful purpose, but instead GWs and GWs are going to effectively nothing. I suspect at some point a psychological threshold is going to be hit and BTC is going to plummet through the floor. A lot of very specialized hardware is going to derelict. As an aside, many of the comments in this discussion, and the moderation of the same, is indicative of how profoundly irrational people can become when they have skin in a game. If I held BTC I'd probably be trying to rationalize why it should be worth something, against all rational analysis.
- gl00pp 8y ago
  TF are "GWs and GWs" ?
  - _Tev 8y ago
    GigaWatts
singularity2001 8y ago
> breach $20k again This is so unreasonable for a piece of data which was worth $0.1 a decade ago and is easily cloneable (trivially if not for network effects and integration)
- conanbatt 8y ago
  Currency and crypto are only made of network effects, so..
- jki275 8y ago
  The entire concept of bitcoin requires the network effects and integration. Pretending the hash value of a block is useful in any way without them misses the entire point of its existence.
atomical 8y ago
> On the other hand if, like I believe, it's mostly scams, empty promises and poor understanding of technology and/or economy, then this might be the beginning of the end. There are several startups that have made progress but not enough progress that the value of their token has increased through network effect. The Brave browser has 5MM MAU. There is still a lot of development to be done to whitelist ads and pay users for their attention. It's a good start though. Other startups are starting to realize that on boarding new users with Meta Mask doesn't work. The users unfamiliar with cryptocurrency exit the funnel early because installing a plugin and depositing money makes the experience much more difficult. This is the case with FunFair currently. Increased adoption probably won't happen until 2022. Because these assets are liquid it's likely we'll see an even bigger drop until then.
lhl 8y ago
To me, it’s obvious that the Bitcoin Cash “hash war” has been what’s triggered the fall of the 5K support level (and to me, it’s telling that 200 messages in, no one has really even mentioned it). The contentious fork has been very disruptive, causing BCH trading to be halted and lowering trading volume across the board. At the same time you have a huge redeployment in mining resources, up to 4exa on the Bitcoin.com pool alone pointed to BCH to defend vs a BSV takeover attempt (along with threats of 51% attacks and long range re-.org attacks) - up to 30% of SHA-256 mining power was pulled, mining at 100-200% less profitability of BTC, which also would have had some pretty big effects on the market (potentially parties dumping BTC to fund hashrate, potentially other miner related effects). This sort of shakiness/distraction/fud drives the whole market down, which drives more selloffs, which drives articles and discussion like this, repeat. Now that this seems to be largely over (and exchanges are opening BCH/BSV back up) you’re actually seeing a bit of a price/volume bump after this cratering, although I think people will be skittish for a while. I think it’s right to be skeptical - the people that are building real things will keep doing so, largely under the radar, and the markets will do as the markets will.
- matthewbauer 8y ago
  I’ve never understood the commonly held view that miners can effect the price. The distribution of coins is on a fixed schedule it shouldn’t matter how many miners there are. Price should not change from any of that.
  - millettjon 8y ago
    This may be more related to rapid liquidation of holdings which does affect the short term. Long term it should average out.
  - deleted 8y ago
    [deleted]
  - dragonwriter 8y ago
    > The distribution of coins is on a fixed schedule No, it's not. The distribution of coins is affected in the short term by the actions of miners; it has periodic difficulty adjustments to intended to target a fixed long-term rate, but it is not a fixed schedule.
j_shi 8y ago
Main reason likely natural down cycle following parabolic run-up. Remember btc/crypto still a global, minimally regulated market driven by and large by unsophisticated retail investors (though pros are increasingly getting in). Domino effect / reflexivity on way up and on way down. Marginal buyer was simply exhausted at some pt, and institutional demand expected to be next big marginal buyer didn't materialize as quickly as people thought. That said one guess on a trigger for the most recent sell off was that Bitcoin Cash, a fork of "reference" Bitcoin, forked in a bigly hostile way, resulting in two new Bitcoin Cash chains (Bitcoin Cash ABC and Bitcoin Cash SV - for satoshi vision lol) each now with its hash power majority controlled by one group e.g. highly centralized. The market is confronting the possibility that proof of work -- the most widely used consensus mechanism -- is way more centralized than it thought, and way more subject to value destruction from a tiny % of people.
conanbatt 8y ago
For all the hype, bitcoin really is not worth its price to me. I would not sacrifice 4k to have 1 bitcoin for its use today. Its expensive, slow and inconvenient to transfer. When it hit 18k-20k last december it was absolutely nuts. Bitcoin is not there: it has no mainstream product market fit. Its pretty useless. And it hasn't been fulfilling its expectations of not being so.
- splintercell 8y ago
  What do you think about Gwern's article on Bitcoin from 2011? https://www.gwern.net/Bitcoin-is-Worse-is-Better https://www.gwern.net/Bitcoin-is-Worse-is-Better
  - conanbatt 8y ago
    Lightly scanned the article. I dont criticize bitcoin for being imperfect, but for being useless as it is today. Moving dirty money, or escaping capital controls is great, but still a very limited use case. Its really impractical to do any mundane thing. I.e. replacing credit cards and buying your coffee would be a massive human landmark event. But its not close to that, and there's no clear path to that. So why would you spend 6k to hold this piece of land today, when that buys you a 3% secure yield or a many other investments with greater returns.
- petre 8y ago
  It was quite useful to people getting money out of China.
DoctorOetker 8y ago
I am nobody to speak for the market, but if I were the market my rationalization would be the prospect of Algorand
anonyppppp 8y ago
It's the holidays and the market is a bit bearish on crypto so folks are selling to free up some $$$
- mancerayder 8y ago
  Wrong hypothesis: the big run up started exactly this week last year.
  - anonyppppp 8y ago
    That big run up was at the tail end of a slow and gradual incline which contributed to the massive bull rush. Now the market has been in a slump so easy timing to dump.
tim333 8y ago
Speculating here but if you look at the price graph this year it looks like someone was trying to prop it up and keep it above $6000. Maybe tether/bitfinex or the Chinese miners, dunno. But anyway this would require $17m or more coming in to the market each week to cover the mining rewards. Maybe that dried up and the buyers ran out of money, then once it broke people tried to sell out before it got worse?
- chillacy 8y ago
  Perhaps a dumb question but how do you know it was one person/organization as opposed to general market forces?
  - ceejayoz 8y ago
    Huge spoofed orders: https://hackernoon.com/meet-spoofy-how-a-single-entity-dominates-the-price-of-bitcoin-39c711d28eb4 https://hackernoon.com/meet-spoofy-how-a-single-entity-domin... Huge influxes of Tether: https://www.nytimes.com/2018/06/13/technology/bitcoin-price-manipulation.html https://www.nytimes.com/2018/06/13/technology/bitcoin-price-...
  - tim333 8y ago
    I guess you don't really know unless there is some inside type information. Often currencies are officially supported by governments but with bitcoin the parties seem secretive.
mikestew 8y ago
I'm really curious if somebody here could venture a guess about the reasons for the sudden drop One could probably write pages on the topic, but here's my one sentence summary: reality didn't match the hype, and markets are coming to that realization. Corollary: hype-driven price goes up much more slowly than reality-driven drops. Simplistic though it might be, it's the reason for most big drops in equities markets. That biotech that might be on to a cure for prostate cancer? Up and up she goes...until the FDA trial says it doesn't work. New battery tech company says they'll have batteries that can drive you SF->NY and a full charge takes 30 seconds! Buy, buy! Oh, BTW, the batteries will cost $10K/kWh. <effect: dying_PacMan_sound/> New way of paying for things that will eliminate cash, and all the geeky kids are into it? Those nerds know what they're doing, right? 'cuz I sure don't, and I don't want to miss out! Oh, all I can buy are illegal drugs of unknown quality, and I can lose all of my money if I forget my password or make one tiny mistake and the hackers get it? I bought in at $19.5K, why isn't it still going up? Be glad it's only down to $4500.
narrator 8y ago
I think the bell that rung at the top was the same bell I've seen in other speculative markets: The main people you would expect to see cheerleading throw in the towel and say it's crazy. That happened writ large at the beginning of 2018. There was one presentation at a Bitcoin conference I went to in early 2018 where this long haired huppy guy went through CoinMarketCap and called out every single thing on there as bullshit and scams.
- Forbo 8y ago
  Any chance this talk was recorded? I would love to watch it!
  - narrator 8y ago
    It was at the world crypto economic forum. I can't remember who it was, but he had a beard and olive skin, so that should hopefully narrow it down a bit. I just stumbled in there while wandering out of another presentation I thought was dull. I think he was going off script for whatever the topic was.
mancerayder 8y ago
Well, there's also some news about the Tether probe: https://www.bloomberg.com/news/articles/2018-11-20/bitcoin-rigging-criminal-probe-is-said-to-focus-on-tie-to-tether?srnd=premium https://www.bloomberg.com/news/articles/2018-11-20/bitcoin-r...

by simias 8y ago

jeletonskelly 8y ago

Trading volume has dropped significantly over the last 6 months. Large holders have been patient waiting for new money to enter the market. Eventually, when the only activity is a few automated traders and the exchange liquidity provider, large holders are faced with opportunity costs of investing in something else and the limited liquidity the market can absorb as they exit. It's a domino effect as they see each other wiping the liquidity off the books as they market sell. No one wants to be the last one holding the bag.

superkuh 8y ago
This is also the result of the federal governments of the world, the US in particular, choking off all the fiat<->crypto exchanges with their expanded and draconian know your customer laws. As an anecdote, I didn't buy my monthly bitcoin purchase early this month because I've been (and still am) locked out of my ~5 year old coinbase account I use constantly because they are being required to require new forms of ID and I cannot supply it. Even if the stupid speculation markets and their off chain antics didn't exist this would be a problem.
- scient 8y ago
  Yeah, KYC/AML is totally bad because of trying to actually prevent money being funnelled into crime organization etc. This is why I cant stand ignorant crypto-fans.
  - Hermel 8y ago
    Even according to the IRS's own estimates, laws like Fatca would never pass a cost/benefit test. The implementation costs of such bureaucratic monstrosities is in the range of hundreds of billions, whereas the benefit is a few orders of magnitude lower. The established banks do not complain much about it because the high fixed cost of compliance disproportionally affects small firms, thereby protecting them from being disrupted by innovative startups.
    - deleted 8y ago
      [deleted]
    - simias 8y ago
      So I know next to nothing about these regulations but what do you mean by "cost/benefit" exactly? Surely if these rules are meant to fight (directly or indirectly) organized crime then you can't just judge them on the amount of money saved? If you spend $10 millions to prevent $1 million to reach a terrorist organization, can't you consider it money well spent?
      - avar 8y ago
        FATCA is about making non-US financial institutions report to the IRS et al about holdings of US citizens abroad. Worrying about terrorist cells in foreign countries made up of U.S. citizens is absurd.
        toomuchtodo 8y ago
        FATCA is the stick used to dissuade tax evasion by US citizens. If people think they can evade taxes successfully, they will. Whether this impacts Bitcoin or other crypto is inconsequential.
Novashi 8y ago
It seems like the bitcoin selloff coincided nicely with the general stock market selloff. I think someone wanted out of bitcoin after staring at a flat price line for 6 months.
- jeletonskelly 8y ago
  Someone wants out and they know there's limited buy side liquidity. Once the primary market maker algos detect a big move, they get out of the way so they aren't overexposed long or short. Once they pull the liquidity it becomes a race to sell first.
- Scoundreller 8y ago
  As a stock market investor, a flat line for the past 6 months sounds pretty good to me!
  - polynomial 8y ago
    but no dividends.
aviv 8y ago
The Saudis facing confiscation and raids back home dumped their cash into Bitcoin which fueled the rally to $20k. They are now pulling the money out.
- ucha 8y ago
  I never heard this one... what do you have to back it up?
  - olivermarks 8y ago
    Jonathan Nelson, Managing Director HACK Fund discussed this on last week's sharespost webinar. The slides and replay should be up soon if you check their site. Discussion was titled 'State of Crypto Markets and Regulation: USA vs. the World – SharesPost Expert Series'
- olivermarks 8y ago
  The vast majority of cryptocurrency transactions are in Asia, meaning China, Singapore & Japan according to a sharespost webinar I tuned in to last week. Getting money out of China has been a driver of cryptocurrencies in 2017 and early 2018, with little utility other than moving money around to invest in safer havens.
  - tacon 8y ago
    I can see Chinese capital flight as a driver of transactional bitcoin. How does that lead to holding bitcoin as an investment?
- dopamean 8y ago
  This reminds me of an anecdote from Liar's Poker where the writer talks about how not even the oil traders understood what caused the price of oil to move and so they'd just make up outlandish stories about the Saudis.
- charlesdm 8y ago
  And Santa wears a hat
oldpond 8y ago
Sounds just like a ponzi scheme bursting. No surprise.
- ric2b 8y ago
  Ponzi schemes tend to collapse quickly and spectacularly.
tialaramex 8y ago
Yup. Liquidity isn't something you need to care about if you trade something listed on an exchange, at reasonable volumes (neither very tiny nor enormous). If nobody else wants it the market makers will automatically take the other side of any trade at the listed buy/sell price, and keep the difference, that's their job. But Bitcoin, BBS stocks, weird instruments that aren't listed anywhere, those you can only sell if you can find a buyer, if there is no buyer (or no buyer at the volume you care about) then the "price" doesn't mean anything at all.
- repomies6999 8y ago
  LOL, numerous listed stocks are way more illiquid than bitcoin.

hi5eyes 8y ago

the recent fork/shit show within the bitcoincash camp (im not getting into this debate just an observation) resulting in 2 forks and split in hash power. the camps being btcsv and btcacb. yes those are their real names, and I think they're all stupid

npongratz 8y ago
> ... the camps being btcsv and btcacb. yes those are their real names ... I think you might have a typo, I believe it would be btcabc: https://www.bitcoinabc.org https://www.bitcoinabc.org
- hi5eyes 8y ago
  you're right mb
lostmsu 8y ago
Why would it affect BTC, let alone ETH and others?

hyperpape 8y ago

I can't swear that it's the cause, but it looks like expectations have changed around whether ICOs would be required to classify themselves as securities: https://twitter.com/prestonjbyrne/status/1064714421061255168 https://twitter.com/prestonjbyrne/status/1064714421061255168 This has been obvious to everyone paying attention for a long time, but most people in this market are there because they don't pay attention.

danaos 8y ago
As a counterpoint, bitcoin has dropped faster than Ethereum, the principal ICO platform.
- airstrike 8y ago
  Only because Ethereum dropped significantly more earlier in the year (from $293 in September to $193 a few days later...)

ceejayoz 8y ago

Ongoing concerns about Tether can't have helped. https://www.bloomberg.com/news/articles/2018-11-20/bitcoin-rigging-criminal-probe-is-said-to-focus-on-tie-to-tether https://www.bloomberg.com/news/articles/2018-11-20/bitcoin-r... > As Bitcoin plunges, the U.S. Justice Department is investigating whether last year’s epic rally was fueled in part by manipulation, with traders driving it up with Tether -- a popular but controversial digital token. > While federal prosecutors opened a broad criminal probe into cryptocurrencies months ago, they’ve recently homed in on suspicions that a tangled web involving Bitcoin, Tether and crypto exchange Bitfinex might have been used to illegally move prices, said three people familiar with the matter.

dmos62 8y ago

I don't having much to say about fundamentals. From a technical analysis point of view, according to EWT, a correction mostly happens in three strokes. First stroke was 20k->6k, second was a year long sideways move, this is the third one that will reach the extreme of the correction. In these terms, what we're seeing this last week is an extension of what was happening beginning of 2018; i.e. to ask why this happened is the same as to ask why the price fell from 20k.

koonsolo 8y ago

I am a firm believer that cryptocurrencies can offer major value to the world. But if you look at what's out there, Bitcoin etc are outdated technologies. Since Bitcoin was always leading the charts, in my opinion the whole market had to crash, and out of that it will show which ones offer true value. You shoudn't focus too much on price, but mainly focus on applicability and adoption/use. Most doctors here only offered cash payments, but nowadays a lot of them offer smartphone payments. They lose 6 cent on every transaction. Imagine a world where I can pay instantly, worldwide with a single currency, 0 fees. The technology is already here, the adoption not (yet ;). We have email, which is basically instant, free and worldwide. Why can't we have the same for payments? Only time will tell if such a major shift can happen.

zanny 8y ago
The thing is that the trading price of crypto does not mean anything to its adoption or utility. You can write a payout algorithm that grows the monetary base so fast the price can't appreciate. That coin could become unbelievably successful without ever being a viable dragon horde to sit on of endlessly growing value due to scarce supply. Its really a reflection on the doomed state of the mainstream crypto mindset to only really care about getting rich quick in fiat off cryptocurrency bubbles. Bitcoin doesn't matter as a currency, it matters as a pyramid scheme. The people investing in it for personal financial gain dramatically outpace those trying to use it to overthrow fiat hegemony. There have been coins like peercoin and Steem that have in small regards or parts tried to push the adoption envelope as a usable exchange medium over the pyramid scheme, but they are few and far between and their general unpopularity really shines a light on where the scenes true values lie.
Brockenstein 8y ago
>We have email, which is basically instant, free and worldwide. Why can't we have the same for payments? Only time will tell if such a major shift can happen. Ever had a free email account compromised? Good luck. Not to mention email isn't free. Someone is paying for it and making money from it. Even if that is concealed behind several layers that aren't obvious to most users.
perardi 8y ago

tboyd47 8y ago

Occam's Razor - could just be a symptom of the current stock market crash.

Scoundreller 8y ago
What stock market crash? Vanguard’s Total Market Index (VTI) is up 2% for the year, and only down 10% from its All Time High (excluding dividends): https://finance.yahoo.com/quote/vti https://finance.yahoo.com/quote/vti Tech stocks aren’t the whole market.
- wyldfire 8y ago
  True but a lot of Bitcoins investors probably get disproportionate amounts of equity compensation in that part of the market.
- kart23 8y ago
  Even index stocks are in free fall right now. Check again. VOO has dropped 1.5% today, which is pretty bad for an index stock.
  - ceejayoz 8y ago
    > VOO has dropped 1.5% today, which is pretty bad for an index stock. Uh, what? An index stock mirrors, as closely as possible, the market it's indexing. If the market goes down 1.5% - which is extremely common - so will VOO.
    - sneak 8y ago
      I think GP meant it is pretty bad in the market if the composite index average (and thus index ETF) is down 1.5% in a single day.
      - ceejayoz 8y ago
        Which is a silly claim. The markets being down (or up) 1.5% is an unremarkable trading day. https://thumbor.forbes.com/thumbor/960x0/https%3A%2F%2Fblogs-images.forbes.com%2Fmikepatton%2Ffiles%2F2016%2F01%2FDJIA-Daily-Percent-Chg-from-10-1-1928-to-1-28-2016-1200x499.jpg https://thumbor.forbes.com/thumbor/960x0/https%3A%2F%2Fblogs... Per this chart, almost 20% of Dow trading days fall in the 1-2% change range.

tyingq 8y ago

ETH isn't doing well either, so there must be more than the BTC cash fork in play.

pilpulpitbull 8y ago
All cryptocurrencies are directly correlated to the price of Bitcoin. My personal theory is the participants in the Bitcoin Cash hashwar (Bitcoin.com, bitmain, and CSW) are selling their massive BtC stash to finance rented hashrate and cover electricity costs.
dlwiest 8y ago
BTC is strongly linked to the rest of the crypto market. When BTC drops, the rest follow almost always.

pavlov 8y ago

Perhaps the recent SEC action against multiple ICOs is contributing too? Long story short, the American regulator has determined that the 2017 hype-fuelled ICOs were unregistered security sales (just like everyone said they are, but ICO promoters pretended to hand-wave away by mumbling something about utility tokens). They've fined an initial wave of ICOs to the tune of $250k and mandatory refunds to all who bought tokens in the ICO. The catch here is that the refunds must be paid in USD, but the ICOs mostly raised in cryptos. If you did an ICO in December 2017 and raised $10M worth of cryptos but never cashed out any of it, your treasury is now perhaps worth only $2M, yet you're liable for $10M USD refunds. Any ICO administrator within reach of American regulators ought to be cashing out while they can...

tfha 8y ago
I wonder if ico issuers are selling off btc and eth in order to have enough cash on hand to do the asset buybacks and still be ahead. Anyone who ICO'd in early 2017 (including big names like tezos and filecoin) have enough USD value of btc and eth to comply with the SEC and still have 9 figures left. It's a good time to take profit if you did that, get off the hook and still be incredibly cash wealthy. That would also explain why ripple is still stable, not as many icos hold xrp as btc and eth

deleted 8y ago

[deleted]

quickben 8y ago

> could venture a guess about the reasons for the sudden drop It has to decline, I was giving it 2-5 yeas, but it seems it dropped much faster: https://news.ycombinator.com/item?id=15760415 https://news.ycombinator.com/item?id=15760415 As for the faster than usual now, my guess is few things. Main contribution is NVidia that had their earnings report, they told the planet flat out gpus aren't selling as well, so the gig that everybody is increasingly mining was called up. Normal people check out, traders can't trade if they can't short it and it's starts going downhill. So anybody that's in the business of not losing money stops the bots. But nvidia the most visible thing that creates sentiment among the crypto-evangelist population it seems. The other reasons wound be, end of a 40 year bull run across western democracies, end of the minor cycle economy run, add to that a trade war, QT, people overexposed on the houses with HELOCs and stuff from that QT, and everybody will be pulling cash from everywhere since cash will matter fairly soon. The rest is standard, stock market drop by 20% or much more, asset bubble deflation, etc etc. It's all fairly cyclical.

pault 8y ago
Hasn't GPU mining been unprofitable for at least five years now? I remember everyone moving to asics back in 2012.
- dragontamer 8y ago
  Any GPU mining is assumed to be on Ethereum, Monero, or ZCash. Which... at least a few months back... remained profitable. I don't know if its profitable anymore since the prices have dropped so dramatically.
- deleted 8y ago
  [deleted]
dragontamer 8y ago
> Main contribution is NVidia that had their earnings report, they told the planet flat out gpus aren't selling as well, You've got cause / effect backwards. The slide started on Nov 13th, while NVidia's earnings report is Nov 15th. The NVidia thing was my first hypothesis too. But it doesn't seem to hold up to scrutiny.

rebuilder 8y ago

The latest bubble continues to deflate. I'm not about to make any predictions at all, but a drop to 1500 or so would be quite "normal" for Bitcoin, historically speaking. Again, there's no particular reason to think it will go there, or if it does, stop there. The volatility in crypto is just so high it's hard to say there's any particular reason for price movements beyong trader's reactions to price movements.

xiphias2 8y ago

With BTC this is just normal volatility. The usual drawdowns that are happening every 1-3 years are about 75% - 95%. If the price of BTC goes under $1000 that will be something new. I can't speak of other coins as they are a very different market (and I'm a Bitcoin maximalist).

dd36 8y ago
Demand will not recover.
- coinshakedown 8y ago
  This probably won’t age well
pbhjpbhj 8y ago
By "Bitcoin maximalist" I assume you mean you want to see it enter widespread use as currency? Any thoughts on the extreme environmental downside of BTC?
- natmaka 8y ago
  Existing (non crypto/legal tender) also has environmental downsides. Is there a serious study comparing the environmental downside of currencies (crypto and not crypto)?
- xiphias2 8y ago
  It means that I think it will eat all money (and most altcoins as well) over the next 15-20 years. About the downside: I hope using coal as an energy source will be shut down ASAP. Bitcoin protocol would easily work with only sustainable energy sources, but it doesn't work without the security of proof of work (all other algorithms for decentralized concensus so far decrease security of the protocol). Luckily China already took some steps to close down the most polluting Bitcoin miners.

mdgrech23 8y ago

Quite the lexiphanicism aren't you?

simias 8y ago
Not purposefully I assure you. English is not my mother tongue and I know that my vocabulary is all over the place at times. If you have some feedback about things I could've worded better I'll gladly hear it.
- deleted 8y ago
  [deleted]
Stratoscope 8y ago
If you're going to use a fancy word like lexiphanicism to criticize someone, you should at least use it correctly. ("Lexiphanicism" does not refer to a person, but to their use of language.)

jackjackk0 8y ago

I like to think it's because of this article: https://www.nature.com/articles/s41558-018-0321-8 https://www.nature.com/articles/s41558-018-0321-8

SNACKeR99 8y ago
Nothing has soured me more on bitcoin than its impact on the environment. If for no other reason than that, I'm done with it.
gl00pp 8y ago
I mean I hear ya but it seems a little bias when they are 'projecting'. I mean, if I had 0 wives last week, got married this week, does that mean in 2 months i'll have 8 wives? (no i am not in UT) "Here we show that projected Bitcoin usage, should it follow the rate of adoption of other broadly adopted technologies"
- asdff 8y ago
  Even today bitcoin is a serious energy concern. Currently the network uses as much energy as Denmark, while commanding a 0.033% share of cashless transactions. Which countries will bitcoin surpass in energy usage in 2019 as mining gets exponentially more difficult by design?

deleted 8y ago

[deleted]

jasonwen 8y ago

I discussed the things that happened specifically on November 14th in my Quora answer: https://www.quora.com/Why-did-the-price-of-Bitcoin-plummet-down-on-November-14-2018/answer/Jason-Wen-3 https://www.quora.com/Why-did-the-price-of-Bitcoin-plummet-d... It's very very likely because of the Bitcoin Cash fork. It has become a pissing contest between Roger Ver (Bitcoin ABC) and Craig Wright (Bitcoin SV). While Craig trolls and threatens the Bitcoin ABC side by "bleeding them dry" in a hash war. Jihan Wu, founder of Bitmain quoted: “I have no intention to start a hash war with Craig, because if I do, by relocating hash power from BTC mining to BCH mining - BTC price will dump below yearly support; it may even breach $5,000. But since Craig is relentless, I am all in to fight till death! The war is related to Bitcoin as the price of Bitcoin tanks because in a hashing war, both sides are likely to rent hash from the Bitcoin mining pool. This is being settled in Bitcoin, sold on the market to cover electricity, and thus suppressing the price of Bitcoin. Since Craig is trolling around, threatening a price of $1,000 per Bitcoin in a full out hash war, people are selling before it gets even more ugly. Another downside which reinforces the price suppression is for Proof-of-Work systems (where miners are rewarded based on their computing power), there's an unfortunate feedback loop in price drops. As said by Colin, founder of Nano currency, Low price -> low mining rewards -> turn off some miners to lower cost -> lower hash rate -> longer transaction confirmation -> lower price. More details can be found in my Quora answer about this.

wpietri 8y ago
I think it's fascinating that this is 100% different than what Bitcoin was sold as. The theory of Bitcoin was basically "money without people". You wouldn't have to worry about governments and politics; value would be sent and stored in pure pieces of math. Mere governments couldn't possibly do as well as the glorious algorithms wisely fixed in advance by, etc, etc. But if you're right, Bitcoin has way more politics than a third-world kleptocracy. And it clearly lacks the institutions and formal procedures used to shape those kinds of political currents into useful effects on the currency and the economy.
- latchkey 8y ago
  There is differences between the white paper and the implementation. There is also another elephant in the room... whales who have enough money (thanks to crypto currencies) to influence things.

sneak 8y ago

I predicted last fall there would be a huge sell-off as short term cap gains (35%) turn into long term cap gains (15-20%) at the 12 month mark. Time to lock in the remaining profit and realize those gains.

throwaway5752 8y ago

"somebody here could venture a guess about the reasons for the sudden drop" It has no inherent value, is a poor currency substitute, it is a poor store of value, and is on a long term trajectory to zero. People are realizing this and liquidating large/low basis cost positions.

gaff33 8y ago
This may all be true - but it fails to explain why it crashed now (as opposed to 2 months ago, or 2 months hence).

endorphone 8y ago

"I'm really curious if somebody here could venture a guess about the reasons for the sudden drop" A more telling question is how it has held any value at all for as long as it has. There was a period where BTC's rise was rationalized via its promise to become the currency of the future. Does anyone actually believe that now, though? BTC instead has become nothing more than a speculation vehicle built on a foundation of absolutely nothing. No rational analysis sees it being the basis of really anything at all, and that mad rush has seen an outrageously inefficient system put in play. It wouldn't be bad if it were actually the basis of meaningful purpose, but instead GWs and GWs are going to effectively nothing. I suspect at some point a psychological threshold is going to be hit and BTC is going to plummet through the floor. A lot of very specialized hardware is going to derelict. As an aside, many of the comments in this discussion, and the moderation of the same, is indicative of how profoundly irrational people can become when they have skin in a game. If I held BTC I'd probably be trying to rationalize why it should be worth something, against all rational analysis.

gl00pp 8y ago
TF are "GWs and GWs" ?
- _Tev 8y ago
  GigaWatts

singularity2001 8y ago

> breach $20k again This is so unreasonable for a piece of data which was worth $0.1 a decade ago and is easily cloneable (trivially if not for network effects and integration)

conanbatt 8y ago
Currency and crypto are only made of network effects, so..
jki275 8y ago
The entire concept of bitcoin requires the network effects and integration. Pretending the hash value of a block is useful in any way without them misses the entire point of its existence.

atomical 8y ago

> On the other hand if, like I believe, it's mostly scams, empty promises and poor understanding of technology and/or economy, then this might be the beginning of the end. There are several startups that have made progress but not enough progress that the value of their token has increased through network effect. The Brave browser has 5MM MAU. There is still a lot of development to be done to whitelist ads and pay users for their attention. It's a good start though. Other startups are starting to realize that on boarding new users with Meta Mask doesn't work. The users unfamiliar with cryptocurrency exit the funnel early because installing a plugin and depositing money makes the experience much more difficult. This is the case with FunFair currently. Increased adoption probably won't happen until 2022. Because these assets are liquid it's likely we'll see an even bigger drop until then.

lhl 8y ago

To me, it’s obvious that the Bitcoin Cash “hash war” has been what’s triggered the fall of the 5K support level (and to me, it’s telling that 200 messages in, no one has really even mentioned it). The contentious fork has been very disruptive, causing BCH trading to be halted and lowering trading volume across the board. At the same time you have a huge redeployment in mining resources, up to 4exa on the Bitcoin.com pool alone pointed to BCH to defend vs a BSV takeover attempt (along with threats of 51% attacks and long range re-.org attacks) - up to 30% of SHA-256 mining power was pulled, mining at 100-200% less profitability of BTC, which also would have had some pretty big effects on the market (potentially parties dumping BTC to fund hashrate, potentially other miner related effects). This sort of shakiness/distraction/fud drives the whole market down, which drives more selloffs, which drives articles and discussion like this, repeat. Now that this seems to be largely over (and exchanges are opening BCH/BSV back up) you’re actually seeing a bit of a price/volume bump after this cratering, although I think people will be skittish for a while. I think it’s right to be skeptical - the people that are building real things will keep doing so, largely under the radar, and the markets will do as the markets will.

matthewbauer 8y ago
I’ve never understood the commonly held view that miners can effect the price. The distribution of coins is on a fixed schedule it shouldn’t matter how many miners there are. Price should not change from any of that.
- millettjon 8y ago
  This may be more related to rapid liquidation of holdings which does affect the short term. Long term it should average out.
- deleted 8y ago
  [deleted]
- dragonwriter 8y ago
  > The distribution of coins is on a fixed schedule No, it's not. The distribution of coins is affected in the short term by the actions of miners; it has periodic difficulty adjustments to intended to target a fixed long-term rate, but it is not a fixed schedule.

j_shi 8y ago

Main reason likely natural down cycle following parabolic run-up. Remember btc/crypto still a global, minimally regulated market driven by and large by unsophisticated retail investors (though pros are increasingly getting in). Domino effect / reflexivity on way up and on way down. Marginal buyer was simply exhausted at some pt, and institutional demand expected to be next big marginal buyer didn't materialize as quickly as people thought. That said one guess on a trigger for the most recent sell off was that Bitcoin Cash, a fork of "reference" Bitcoin, forked in a bigly hostile way, resulting in two new Bitcoin Cash chains (Bitcoin Cash ABC and Bitcoin Cash SV - for satoshi vision lol) each now with its hash power majority controlled by one group e.g. highly centralized. The market is confronting the possibility that proof of work -- the most widely used consensus mechanism -- is way more centralized than it thought, and way more subject to value destruction from a tiny % of people.

conanbatt 8y ago

For all the hype, bitcoin really is not worth its price to me. I would not sacrifice 4k to have 1 bitcoin for its use today. Its expensive, slow and inconvenient to transfer. When it hit 18k-20k last december it was absolutely nuts. Bitcoin is not there: it has no mainstream product market fit. Its pretty useless. And it hasn't been fulfilling its expectations of not being so.

splintercell 8y ago
What do you think about Gwern's article on Bitcoin from 2011? https://www.gwern.net/Bitcoin-is-Worse-is-Better https://www.gwern.net/Bitcoin-is-Worse-is-Better
- conanbatt 8y ago
  Lightly scanned the article. I dont criticize bitcoin for being imperfect, but for being useless as it is today. Moving dirty money, or escaping capital controls is great, but still a very limited use case. Its really impractical to do any mundane thing. I.e. replacing credit cards and buying your coffee would be a massive human landmark event. But its not close to that, and there's no clear path to that. So why would you spend 6k to hold this piece of land today, when that buys you a 3% secure yield or a many other investments with greater returns.
petre 8y ago
It was quite useful to people getting money out of China.

DoctorOetker 8y ago

I am nobody to speak for the market, but if I were the market my rationalization would be the prospect of Algorand

anonyppppp 8y ago

It's the holidays and the market is a bit bearish on crypto so folks are selling to free up some $$$

mancerayder 8y ago
Wrong hypothesis: the big run up started exactly this week last year.
- anonyppppp 8y ago
  That big run up was at the tail end of a slow and gradual incline which contributed to the massive bull rush. Now the market has been in a slump so easy timing to dump.

tim333 8y ago

Speculating here but if you look at the price graph this year it looks like someone was trying to prop it up and keep it above $6000. Maybe tether/bitfinex or the Chinese miners, dunno. But anyway this would require $17m or more coming in to the market each week to cover the mining rewards. Maybe that dried up and the buyers ran out of money, then once it broke people tried to sell out before it got worse?

chillacy 8y ago
Perhaps a dumb question but how do you know it was one person/organization as opposed to general market forces?
- ceejayoz 8y ago
  Huge spoofed orders: https://hackernoon.com/meet-spoofy-how-a-single-entity-dominates-the-price-of-bitcoin-39c711d28eb4 https://hackernoon.com/meet-spoofy-how-a-single-entity-domin... Huge influxes of Tether: https://www.nytimes.com/2018/06/13/technology/bitcoin-price-manipulation.html https://www.nytimes.com/2018/06/13/technology/bitcoin-price-...
- tim333 8y ago
  I guess you don't really know unless there is some inside type information. Often currencies are officially supported by governments but with bitcoin the parties seem secretive.

mikestew 8y ago

I'm really curious if somebody here could venture a guess about the reasons for the sudden drop One could probably write pages on the topic, but here's my one sentence summary: reality didn't match the hype, and markets are coming to that realization. Corollary: hype-driven price goes up much more slowly than reality-driven drops. Simplistic though it might be, it's the reason for most big drops in equities markets. That biotech that might be on to a cure for prostate cancer? Up and up she goes...until the FDA trial says it doesn't work. New battery tech company says they'll have batteries that can drive you SF->NY and a full charge takes 30 seconds! Buy, buy! Oh, BTW, the batteries will cost $10K/kWh. <effect: dying_PacMan_sound/> New way of paying for things that will eliminate cash, and all the geeky kids are into it? Those nerds know what they're doing, right? 'cuz I sure don't, and I don't want to miss out! Oh, all I can buy are illegal drugs of unknown quality, and I can lose all of my money if I forget my password or make one tiny mistake and the hackers get it? I bought in at $19.5K, why isn't it still going up? Be glad it's only down to $4500.

narrator 8y ago

I think the bell that rung at the top was the same bell I've seen in other speculative markets: The main people you would expect to see cheerleading throw in the towel and say it's crazy. That happened writ large at the beginning of 2018. There was one presentation at a Bitcoin conference I went to in early 2018 where this long haired huppy guy went through CoinMarketCap and called out every single thing on there as bullshit and scams.

Forbo 8y ago
Any chance this talk was recorded? I would love to watch it!
- narrator 8y ago
  It was at the world crypto economic forum. I can't remember who it was, but he had a beard and olive skin, so that should hopefully narrow it down a bit. I just stumbled in there while wandering out of another presentation I thought was dull. I think he was going off script for whatever the topic was.

mancerayder 8y ago

Well, there's also some news about the Tether probe: https://www.bloomberg.com/news/articles/2018-11-20/bitcoin-rigging-criminal-probe-is-said-to-focus-on-tie-to-tether?srnd=premium https://www.bloomberg.com/news/articles/2018-11-20/bitcoin-r...